Tuesday, December 7, 2010

Assets matter just as much as debt

What is often lost in the discussion about government debt, especially in the discussion of extending tax cuts to billionaires is what the debt buys matters.   Increasing debt to finance tax cuts is bad in the same way borrowing to go on vacation or gamble is bad; wealthy folks (despite protestations to the contrary) simply do not spend their proceeds on infrastructure or capital goods - they buy treasury bonds, in essence loaning back to the government at interest, in the same way they make money by charging the public interest for the money they received from the public for free. (or other existing assets, merely recreating a bubble).  Is anything more reprehensible than for corporations, that caused the unemployment, to be generating record profits while unemployment is so high?

Debt offset by collateral, whether in the form a machine, school, hospital, wind turbines, solar panels is entirely different.  As Martin Wolf points out, assets matter.  In fact, I would go so far as to those that argue for consumer spending in the form of more trinkets are also wrong. Consumers were misled into overspending, their inflated housing and stock prices leading them to reduce these balances to a level thought to be more appropriate for their wealth position. When these perceived household balances were discovered to be overstated, consumers STOP spending on consumer goods, and desire to build up these balances. This implies INVESTMENT goods or PUBLIC INFRASTRUCTURE is too low, NOT consumer goods expenditures.

See, eg this article by Axel Leijonhufud on balance sheet recessions.

Assets matter just as much as debt

By Martin Wolf
Published: November 25 2010 20:43 | Last updated: November 26 2010 20:41
Crises have always led to intense discussion of the role of the state. The present one should be no exception. The immediate danger has not passed: just look at events in the eurozone. But the time has come to look at the longer-run implications. This is particularly important when one considers fiscal consolidation. On this I make a simple point: it is not just about debt; it must also be about assets.

rest here: http://www.ft.com/cms/s/0/fb6c9312-f8d1-11df-b550-00144feab49a.html

Monday, November 22, 2010

Chalmers Johnson passes on at 79

More here:


by his partner at the Japanese Policy Research Institute, Steve Clemons:

One of  really important thinkers and writers of American Empire. 

As Steve writes:  

who from my perspective rivals Henry Kissinger as the most significant intellectual force who has shaped and defined the fundamental boundaries and goal posts of US foreign policy in the modern era.
 He will be sorely missed.


Also nice piece on Chalmers at Democracy Now,  
Monday, November 22, 2010

Wednesday, November 10, 2010

Santa Fe City Council Proposed Resolution on a Training Proposal

 This appeared in last Thursday's Albuquerque Journal, November 4.

Council To Consider Support for Flyover Training

By Kiera Hay
Journal Staff Writer
          Breaking from its neighbors, the Santa Fe City Council is set to consider next week a resolution supporting — with conditions — an Air Force proposal to create a low-altitude tactical navigation (LATN) area in northern New Mexico and southern Colorado.
        The measure marks a flip-flop of sorts. City Councilor Rebecca Wurzburger last month introduced a resolution opposing the flyovers — a stance in line with that taken by Santa Fe, Taos and Rio Arriba counties, among others, as well as the city's own Public Works Committee. Wurzburger withdrew the resolution at last week's City Council meeting.

Read more: ABQJOURNAL NORTH: Council To Consider Support for Flyover Training http://www.abqjournal.com/north/
The Santa Fe New Mexican reported on the Council resolution Monday, November 8.

Santa Fe New Mexican

City considers support of flyovers

Measure on training flights moves forward ahead of impact study

The Santa Fe City Council is moving toward passing a resolution that supports, with conditions, the U.S. Air Force plan for low-altitude training flights over Northern New Mexico.

On Monday, the council's Public Works Committee recommended passage, with a sole dissenting vote from Councilor Rosemary Romero. The measure goes to the full City Council on Wednesday.

The resolution would support a proposal to establish a so-called Low-Altitude Tactical Navigation training area, but only if an environmental assessment, now under way, identifies potential impacts to Northern New Mexico and Santa Fe and determines ways to mitigate the impacts.

"Such impacts include, but are not limited to, possible detrimental effects to air space/air traffic, noise levels, public safety, air quality, physical sciences, biological sciences, cultural and historic resources, land use and recreation, tourism and other socioeconomic elements of the peaceful and quiet enjoyment of affected areas, as well as possible increases in forest fires due to aircraft crashes or flare use," says the resolution sponsored by Mayor David Coss and Councilor Rebecca Wurzburger.

Wurzburger last month withdrew a resolution she had sponsored opposing the planned flights, which also had prompted expressions of concern by officials in other Northern New Mexico communities and counties. At the urging of New Mexico's congressional delegation, the Air Force this fall delayed implementing such a plan while it gathers more public comments.
rest here

My response, emailed to Mayor Coss and the eight Santa Fe City Councilor:

Dear Mayor Coss:                                                                   10 November  2010
Dear Santa Fe City Councilors:

I started my career teaching economics at then Southern Colorado State College in Pueblo in 1971 [I taught quite a few Air Force Academy cadets their economics], and was hired by director Howard McKee to be a part of the Skidmore, Owings, and Merrill  [SOM] Environmental Study group during the summer of 1972 to contribute to an EIS on the Mount Hood Freeway, a study that is still a model for planners around the country.

The irony of this is that Howard is BOTH the poster child of how to do an Environmental Impact Study [EIS] correctly, and how even a committed public servant with a reputation for “building community” can become, along with Chicago entrepreneur and Libertarian Mike Keiser, the poster child of how one can unwittingly be the recipient of enormous wealth transfers from working Americans, what I believe is at play here. [ look inside book here, and read “first pages”]

These experiences (Howard’s and my path crossed several more times on other projects) compel me to advise you that while I find your apparent support of a document that “determines the potential environmental and socioeconomic consequences of the proposed LATN training area on Northern New Mexico" quite laudable, I can unequivocally state that your assertion or belief that an Environmental Assessment can achieve this objective is false. It has absolutely no chance of understanding these impacts.

An EA, by definition, is very brief, keeping its focus only on the impacts of the proposal, and how those impacts might be mitigated. It does not state a purpose that is broad enough so that other alternatives may be considered, which after all, as Section 1502.14. Alternatives including the proposed action, states, beginning thus:

This section is the heart of an environmental impact statement.

By advocating for an EA, rather than an EIS, you are in fact contradicting your avowed interest in wishing to know the impacts.  My experience has made it clear  that without defining the purpose in a broad enough way so as to consider real alternatives (flight training by simulators, mission achieved by UAV  drones, use of Osprey and C-130 in humanitarian missions rather than as death squads) it is impossible to even approach the objectives you seem to think might be achieved with an EA.

In short, you could have a resolution EITHER supporting LATN, OR a resolution demanding an evidence based study of the environmental and socio-economic impacts. You cannot have both.  In fact the outspoken support for a broader mission, that considers socio-economic impacts has been advocated by the President, by General McCrystal, by former and present Secretaries of State Dick Cheney and Robert Gates, by two former Sen. Bingaman aides, Winston Wheeler and Steve Clemons, and countless national forums, by people such as Thomas Friedman, Christopher Preble, Andrew Bacevich,  and Robert Pape. Even the recent Military Times Poll of officers does not support the allegation that this mission has the support of military officers, with 83% recognizing the importance of non-military missions.

Sincerely, Erich Kuerschner, Public Choice Economist, Taos, NM  575.770.3338  Erich's Blog

Tuesday, November 9, 2010

Links to Cooking the Books on Employment Data

Much of what is being taught as macro economics and Keynes at the undergraduate level is quite different from what is taught at the graduate level. I am not aware of any other field having this disparity. In any case Mike Whitney gets Keynes, who is having a revival.
Links to articles on "cooking employment data at the Bureau of Labor Statistics.  Taos is fortunate to have folks dedicated to generating their own employment data.
Phantom jobs: Big Lies, Little Lies.  by Paul Craig Roberts
BS From the BLS: Thins are a Lot Worse Than They're Telling Us. By Dave Lindorff

Summer Rerun: America: Banana Republic Watch  by Yves Smith

‎"John Williams’ Shadow Government Statistics" is an electronic newsletter service that exposes and analyzes flaws in current U.S. government economic data and reporting, as well as in certain private-sector numbers, and provides an assessment of underlying economic and financial conditions, net

Saturday, November 6, 2010

Update on Earlier [Nov 3, 2010] Post on David Cay Johnson's Non-reporting of Income shifts:

Update:  Nov. 6, 2011 on Nov. 3 post on David Cay Johnson's Non-reporting of Income shifts:


Checking  into this a bit further, I find this: It gets more and more interesting:

In the midst of electoral chaos yesterday, I did not get around to noting a striking screw-up at the Social Security Administration — you know, the folks with which we’re supposed to entrust our retirements. I’ll get to that in a minute, but first, a Bob Herbert column sent along by a friend, on rising income inequality and a new book on the subject by two political scientists:


        The SSA data Johnston (and Herbert) rely on is completely bogus — the result of a massive error. Check it:
The Social Security Administration asked its inspector general to investigate how a $32.3 billion mistake skewed its statistics on 2009 wages in the U.S.
Two people were found to have filed multiple W-2 forms that made them into multibillionaires, an agency official said yesterday. Those reports threw statistical wage tables out of whack and, in figures released Oct. 15, made it appear that top U.S. earners had seen their pay quintuple in 2009 to an average of $519 million.


UPDATE: Mr. Johnston writes me:
Your final point about me in your post is dead wrong.
The Social Security Administration discovered its mistake BECAUSE my column in Tax Notes drew attention to the figures, which I accurately reported. Gosh, but for my accurate reporting this mistake would have stayed permanently in the record and forever given us a false impression of wage income in 2009!

The whole post is worth a read, for those for whom truth, rather than dogma, is important.  it is here

Thursday, November 4, 2010

Manfred Max-Neef

Just discovered that Manfred Max-Neef's classic "From the Outside Looking In-Experiences in Barefoot Economics" is available in it's entirety, all 210 pages, in .pdf here:


Also available in paperback, recent reprint here:    But at $142.15 for a used paperback, the .pdf seems viable even for those that like the feel of a book.

May be the best economist alive.

He is co-author of a book due out December 15, 2010:

Economics Unmasked: From Power and Greed to Compassion and the Common Good by Manfred Max-Neef and Philip B. Smith (Paperback - Dec 15, 2010)

"Mathematics  brought rigor to economics. It also brought mortis"---Kenneth Boulding

Wednesday, November 3, 2010

David Cay Johnston on non-Reporting of Income shifts



Scary New Wage Data

David Cay Johnston | Oct. 25, 2010 04:35 AM EDT
Now for some really scary breaking news, from the latest payroll tax data.

Every 34th wage earner in America in 2008 went all of 2009 without earning a single dollar, new data from the Social Security Administration show. Total wages, median wages, and average wages all declined, but at the very top, salaries grew more than fivefold.

Not a single news organization reported this data when it was released October 15, searches of Google and the Nexis databases show. Nor did any blog, so the citizen journalists and professional economists did no better than the newsroom pros in reporting this basic information about our economy.

The new data hold important lessons for economic growth and tax policy and take on added meaning when examined in light of tax return data back to 1950.

The story the numbers tell is one of a strengthening economic base with income growing fastest at the bottom until, in 1981, we made an abrupt change in tax and economic policy. Since then the base has fared poorly while huge economic gains piled up at the very top, along with much lower tax burdens.

Read Rest here:

Link to a Graph on median and average income, 1999-2009, in 2009 dollars

Those wishing to hide income disparity tend to use average income, whereas those to whom income distribution matters use median income.

I highly recommend his latest book  Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense (and StickYou with the Bill)  . The book starts with the Bandon Dunes as the poster case for what is wrong with the incentive structure, and how it snares even those with a high regard for building community and fixing incentive structures elsewhere.


Update:  Nov. 6, 2011

Checking  into this a bit further, I find this:

In the midst of electoral chaos yesterday, I did not get around to noting a striking screw-up at the Social Security Administration — you know, the folks with which we’re supposed to entrust our retirements. I’ll get to that in a minute, but first, a Bob Herbert column sent along by a friend, on rising income inequality and a new book on the subject by two political scientists:


        The SSA data Johnston (and Herbert) rely on is completely bogus — the result of a massive error. Check it:
The Social Security Administration asked its inspector general to investigate how a $32.3 billion mistake skewed its statistics on 2009 wages in the U.S.
Two people were found to have filed multiple W-2 forms that made them into multibillionaires, an agency official said yesterday. Those reports threw statistical wage tables out of whack and, in figures released Oct. 15, made it appear that top U.S. earners had seen their pay quintuple in 2009 to an average of $519 million.


UPDATE: Mr. Johnston writes me:
Your final point about me in your post is dead wrong.
The Social Security Administration discovered its mistake BECAUSE my column in Tax Notes drew attention to the figures, which I accurately reported. Gosh, but for my accurate reporting this mistake would have stayed permanently in the record and forever given us a false impression of wage income in 2009!

The whole post is worth a read;  it is here

Another book on the topic of income inequality is Paul Pierson and Jacob Hacker,

Winner-Take-All Politics: How Washington Made the Rich Richer--and Turned Its Back on the Middle Class  much of which can be read online.

 It is discussed by the two authors at a New American Foundation event, video archived here.

Tuesday, November 2, 2010

Military Economics in the News

Cross posted at http://lessmilitary.blogspot.com/

Posted on November 2, 2010 by Matthew Leatherman

This piece originally appeared in the Raleigh News & Observer.
Lt. Gen. John Mulholland, chief of the Army’s Special Operations Command at Fort Bragg, believes his soldiers are “our nation’s most relevant force” and said as much in a Raleigh press conference recently. Ordinarily this claim could be dismissed as the type of chest-thumping any commander does to boost morale back at the unit. The difference is that Mulholland is right – at least for now. The future, however, may be quite different.
                   REST HERE

Survey: Officers favor ‘soft power’

By Andrew Tilghman - Staff writer
Posted : Monday Sep 27, 2010 10:30:10 EDT
A majority of military officers — especially the mid-career officers in the O-4 and O-5 paygrades — support giving more money and strategic emphasis to nonmilitary initiatives such as diplomacy and economic development in order to advance U.S. security interests, according to a recent poll.
Some 83 percent of officers think that nonmilitary tools such as diplomacy, food assistance, health care support, education and economic development are either very important or fairly important for achieving national security goals, according to the poll conducted by a Washington-based education and lobbying group.N.M.
Labs Likely To Gain From Treaty Push
By John Fleck
Journal Staff Writer
          The price tag for maintaining U.S. nuclear weapons could be headed up again.
        After a 10 percent budget increase in the fiscal year that began Oct. 1, and a plan to push for more increases in future years, the Obama administration is telegraphing its intentions to up the ante.

        The new money is part of the administration's efforts to win Senate approval of the New Strategic Arms Reduction Treaty...


The underlying need for the money - whether it is genuinely needed, or is being used to solve a political problem - has been little discussed. Within the government, there have been no significant public voices questioning the spending.
        Outside government there are skeptics, even within the weapons community.
        One of the most visible has been Bob Peurifoy, a retired Sandia Labs vice president and respected weapons program veteran. He argues the new spending is unnecessary for the actual job of maintaining the nuclear arsenal.
        "I suggest that some have trouble distinguishing between 'must have' and 'fun to have' facilities," Peurifoy said in a recent e-mail to a group of prominent nuclear weapons experts.
                             REST HERE


    For Immediate Release
    Monday, November 1, 2010                               


    Antonito, Colo. – Conejos County Clean Water, Inc., a citizen’s group based in Antonito, Colorado, San Luis Valley Ecosystem Council, a group based in Alamosa, Colorado, and Concerned Citizens for Nuclear Safety, a non-governmental organization based in Santa Fe, New Mexico, announced today that they have filed suit in federal court to compel the U.S. Department of Energy (DOE) to conduct a National Environmental Policy Act (NEPA) process that analyzes the impacts of transporting radioactive, hazardous and toxic waste from Los Alamos National Laboratory (LANL) through the state of Colorado via a storage and truck-to-rail transfer site in Conejos County.

    In November 2009, Conejos County officials and citizens of Antonito discovered the active transfer of LANL wastes by crane from flat-bed trucks to rail gondolas less than a quarter mile from the town and within 100 yards of a headwaters tributary to the Rio Grande.  The waste was contained in soft sacks which can hold 24,000 pounds of waste. Neither the local governments nor residents were notified of any plans of the DOE, LANL, San Luis and Rio Grande Railroad, and EnergySolutions (a private Utah-based corporation which operates a radioactive and hazardous waste dump 75 miles west of Salt Lake City) to transport and transfer radioactive, hazardous and toxic waste in Conejos County. The County halted the activities pending compliance with local land use laws.

    “This is a case of the DOE and their contractors trying to impose their will on local communities without providing notice and without any opportunity for a fair impact review,” said Andrea Guajardo, member of the board of directors of Conejos County Clean Water, Inc. “That DOE would attempt to force these impacts on Conejos County, the poorest county in Colorado, without engaging the public in a meaningful way is inexcusable – and illegal,” Ms. Guajardo added.

    In 2005, LANL and DOE signed a consent decree with the New Mexico Environment Department agreeing to clean up certain waste dumps at the LANL facility by 2015.  The waste that was shipped is part of a “cleanup campaign” funded by stimulus funds from the American Recovery and Reinvestment Act.

    “We have a moral obligation to protect the headwaters of the Rio Grande,” San Luis Valley Ecosystem Council director Christine Canaly said, “it’s imperative the public be engaged in this process.”

    DOE officials recently stated that waste from other DOE sites, including Sandia National Laboratory, located in Albuquerque, New Mexico, and the Pantex Site, located north of Amarillo, Texas, could also be transferred at the Antonito location, once it is established as a transfer site for toxic, hazardous, and radioactive wastes.

    “DOE will continue to generate radioactive, toxic, and hazardous wastes and EnergySolutions is looking for ways to take a larger cut of the DOE waste for its dump,” stated Joni Arends, director of Concerned Citizens for Nuclear Safety.  “The community efforts to protect the San Luis Valley and the headwaters of the Rio Grande are absolutely necessary for now and in the future.  If the transfer site in Antonito is opened, DOE will utilize it to the fullest extent and the people of the Valley could expect more and more shipments from other DOE sites.”

    Colorado-based attorney Jeff Parsons, along with the non-profit law firm Energy Minerals Law Center, through attorney Travis Stills, represent the groups.

    Andrea Guajardo, board member, CCCW, 720-939-9948
    Joni Arends, executive director, CCNS, 505-986-1973
    Christine Canaly, director, SLVEC, 719-256-4758
    Jeff Parsons, attorney, 720-203-2871
    Travis Stills, attorney, Energy Minerals Law Center, 970-375-9231

    The complaint may be viewed at:  http://www.slvec.org/

Thursday, October 28, 2010

Model Resolution to Use to Force DOE, NNSA, and LANL Compliance With the Law

I have decided to post a draft resolution to those who recognize that “something is not quite right here”, when DOE, NNSA, and LANL insists that the “CMRR is needed”, despite a tenfold increase in cost. No business man would stay in business if he did not reevaluate his investment strategy when the price of his preferred investment had increased tenfold. To give a scale to what is at stake here,  the  Sunday, Oct 17, 2010 Parade insert that accompanies most NM papers had a picture of Hoover Dam on its cover. That lead story reported:
At a cost of $108 million (or $1.7 billion in today’s dollars), the Hoover Dam was a mammoth construction project. Some 6 million cubic yard of rock were dug up, and 3.25 million cubic yards of concrete poured….
Current estimates of concrete for the CMRR (mostly to mitigate the problem of building a plutonium facility on top of a seismic fault) are for 10% of that concrete; dollar costs are more than double, and already approaching three times the cost of Hoover Dam. If the current rate of cost increases continue, the facility will cost thirty times what Hoover dam costs. 

At what point does the public, DOE, NNSA, and LANL say ENOUGH. This project is absurd?

While there is evidence that even Secretary Chu recognizes the absurdity of “continuing construction” w/o such an evaluation, it is not clear whether the DOE intent is to follow the law. We have a procedure in place to protect the American Public from major waste by requiring an Environmental Impact Statement that mandates honestly defining the purpose of an investment, making the effort to list and study all reasonable alternatives – including BOTH what would happen if the project was not enacted as well as at least one alternative that is outside of the “jurisdiction of the lead agency”.

So until I hear that Secretary Chu acknowledges that this project is too different (the tenfold increase in costs, by itself, is enough to be too different) I will not be convinced that effort is not continuing to feather the nuclear weapons industries nest, rather than do what’s best, as the law mandates.  So Secretary Chu, what is it –“Follow the law and do what the law requires”, or “Look for loopholes to continue to protect the nuclear weapons industry”, as the late Stewart Udall warned us about.

So here is a draft resolution, to use as a model for each governmental or business organization to pass, to stop this hemorrhaging of funds that makes us poorer and less secure.


The ______________________ hereby supports halting any and all work on the proposed CMRR Nuclear Facility at Los Alamos National Laboratory until a new and full Environmental Impact Statement with scoping is completed by the Department of Energy.
WHEREAS, our community is within the impact area of the proposed $4 to $6 billion dollar plutonium processing plant (known as the CMRR Nuclear Facility) at Los Alamos National Laboratory (LANL) we therefore have serious concerns regarding adverse effects on the quality of our air, soil, water and the health, welfare,  and economic well-being of our citizenry; and
WHEREAS, a serious accident during operation, or spill during transportation of nuclear material or waste associated with the proposed plutonium plant could affect our community very adversely, including in ways for which our first responders  and hospitals are not trained or equipped to respond.
WHEREAS, Economic impact studies have not been done on the effects of said plutonium plant on tourism, which is a critical source of income for our community, and on the real estate market; and
WHEREAS, NEPA requires public notice and comment of proposed plutonium processing plant, and recognizing  no such due process has been given to the pueblos or any of the communities of Northern New Mexico ; and
WHEREAS, The National Environmental Policy Act (NEPA) states that an EIS is to serve as an important contribution to the selection of the best alternative, and “will not be used to justify decisions already made”;
WHEREAS, the cost of the CMRR has increased at least ten-fold and the scale and impacts of the project have greatly expanded as well;
WHEREAS, prudent fiscal management and NEPA mandates that cost and economic well being must be considered in designing and selecting alternatives, and a more than ten-fold cost increase makes it highly unlikely that the current alternative is still the most cost effective one,
WHEREAS, only a full and complete new Environmental Impact Statement (EIS) would provide the public with enough information about the current proposal, one which only marginally resembles the proposal under which a 2003 EIS was undertaken, 



Just checked the National Environmental Policy ACT

It uses "needs" only ONCE, in relation to "cultural needs".

I can forgive sociologists and anthropologists using "needs", but not economists, engineers, or "hard" scientists. "Purpose" on the other hand, appears NINE times.

The Council of Environmental Quality, the agency writing the implementing regulations for an Environmental Impact Statement [EIS], unfortunately does use the word "need" seven times, but mostly (all but twice) in conjunction with "purpose and need" .

So could we please talk about "purpose" rather than "need"?

And follow NEPA in defining purpose broadly enough, so that NOT ONLY nuclear weapons, or weapons in general, are options for addressing the broader purpose (security?) as the act MANDATES?

Sec. 1502.14 (c)  Include reasonable alternatives not within the jurisdiction of the lead agency.

This clause was inserted to avoid "feathering one's own nest only", precisely what appears to me the intent of DOE, NNSA, and LANL in trying to avoid doing an EIS by proposing an SEIS suffice.

After all

This section is the heart of the environmental impact statement. Based on the information and analysis presented in the sections on the Affected Environment (Sec. 1502.15) and the Environmental Consequences (Sec. 1502.16), it should present the environmental impacts of the proposal and the alternatives in comparative form, thus sharply defining the issues and providing a clear basis for choice among options by the decisionmaker and the public.

Chu Asks for New Review of Lab

Possible good news:

John Fleck at the Albuquerque Journal reports:

Chu Asks for New Review of Lab 

The head of the Energy Department has launched another review of a proposed multibillion dollar plutonium lab, along with a similar project in Tennessee, amid concerns about the projects' costs.
        Energy Secretary Steven Chu has asked for an independent committee of experts with "no stake in the outcome" to review the need for the two projects, according to an agency statement.
        The proposed Chemistry and Metallurgy Research Replacement building at Los Alamos would replace a 50-year-old lab that works with plutonium. Federal officials have repeatedly argued that the building is vital for the lab's nuclear weapons work. It is years behind schedule, and its current price tag of at least $4 billion is already far over its original budget, despite the fact that design work has not yet been completed.

Read more here.

I am pursuing how sincere and objective this effort is and will report back when (and if ) I learn more about whether this truly is an " independent committee " with " "no stake in the outcome".

We have been arguing long and hard of the desirability of reviewing "the need" for the CMRR.

In the spirit of full disclosure, I must report that I did my graduate work in economics at UCLA under Armen Alchian.  If one learns nothing else from Armen, one realizes that "needs" is a term that has value only if one does not wish to discuss the merits of a sale, but tries to frame the discussion in such a way as to preclude other options from being considered.

So...... until DOE Secretary Chu stops using the term "needs", paint me more than dubious.

I should also disclose that my late father worked in weapons design for most of his career, including various stints at RAND "studying nuclear weapons effectiveness."



by Walter Pincus  Tuesday, October 19, 2010; A13 

Outside of the nuclear weapons communities, little notice was paid last week to the announcement that authorization had finally come through to begin dismantling the last of the minivan-size B-53s, the most powerful thermonuclear bombs ever deployed in the active U.S. stockpile.
A terror weapon if there ever was one, the 10,000-pound B-53 was designed to deliver an explosion of nine megatons. That is the equivalent of 9 million pounds* of TNT, or 600 times the power of the bomb that destroyed Hiroshima.
Believe it or not, the last 50 B-53s were not retired from the active stockpile until 1997, and even then some were held as a "hedge" in case a new threat emerged.

*The equivalence was 9 million tons, not 9 million pounds. Note the corrrection at top of article

Rest here    B-53 at Wikipedia    My comments to Walter’s article are here:

Fact sheet on Pantex Plant from Nukewatch New Mexico   Pantex Plant at LASG.org

The B53 also played a prominent role in Project Chariot, and the book “The Fire Cracker Boys”.  In reading what Wikipedia had to say about the book, I need to state That I read the 1995 version,  the Wikipedia entry  asserts was been reissued in  2007  as The Firecracker Boys: H-Bombs, Inupiat Eskimos, and the Roots of the Environmental Movement). [ I just ordered the 2007 version]
Project Chariot was an attempt by Ed Teller to find a use for his pet project – the second generation thermonuclear high yield weapon, built over the objections of many including J. Robert Oppenheimer to build harbors, settling on “a site at the mouth of the Ogotoruk Creek near Cape Thompson, approximately 30 miles southeast of the Inupiat Eskimo village of Point Hope.”

A large thermonuclear Bomb was to blast the core depression, followed by three small bombs to excavate the entrance channel.  There were two reasons for this proposal: one to find a peaceful use for this device under the Plowshare Program – atoms for peace, and two, to circumvent an expected ban on nuclear testing – to find a way to continue testing by claiming “we are not testing, we are building harbors”. That fooled no one but the American public.

Project Chariot is important as it gave rise to NEPA, and the work done by the few University of Alaska scientists who opposed this ( all four were fired, but much later three were awarded honorary doctorates – one died in a very mysterious way during the height of the opposition), an event not attended the then President Wood) is considered by many to ne the very first Environmental Impact Statement ever performed, although it was not called as such.

The book itself actually started in 1987 from a grant to a movie for public television, but the worry that it “would antagonize … university president Wood”- and restrict U.S. government grants caused “the station to try to find a way to withdraw funding”.  The result was the book. I can highly recommend it as a window into the mindset of the various factions during the late 1950’s to 1960’s.

Wednesday, October 27, 2010

Steve Clemons & Ali Jalali Discuss Afghanistan, Iran & US on PBS NewsHour

Steve Clemons & Ali Jalali Discuss Afghanistan, Iran & US on PBS NewsHour

from Steve Clemon's Blog at TWN.:

I had the opportunity tonight to chat with PBS NewsHour Chief Anchor Jim Lehrer and former Afghanistan Interior Minister and National Defense University professor Ali Jalali about the solvency of Afghanistan President Hamid Karzai given the acknowledgment that he is accepting "bags of cash" from Iran. Interestingly, at a press conference Karzai also acknowledged that his government was getting similar bags of cash from the United States -- which White House spokesman Robert Gibbs denied.
I thought that this was a very good exchange -- and was able to surface some of the key themes from the recently released Afghanistan Study Group Report.
Here is the transcript from the exchange as well.
-- Steve Clemons
Nice job Steve.   There is also a video clip for those (like me) who missed it live,

Until I figure out how to embed a direct video link, i'll have to redirect, in this case here:


Hmm.  Folks remember the bags of cash, the biggest cash withdrawal in the Feds history, in three planeloads, to Iraq?  I once calculated the equivalence of 10 dumptruck of shrink wrap bricks of  $100 bills, each brick $160,00 to $1.6M went to Kirkuk. When the distributing agent was asked who picked it up, he could not remember either the name or what he looked like. He was not even certain that it did not go to those we were fighting.

Remember my letter to then Sen. Bingaman on that one, Steve?



Tuesday, October 26, 2010

Treasury AIG and Timothy Geithner

Seems like creative accounting, of discounting losses by moving "future profits" forward has rubbed off on the Treasury Department.  Read it here:

Treasury Hid A.I.G. Loss, Report Says

How Did the Banks Get Away With Pledging Mortgages to Multiple Buyers?

via Yves Smith's BLOG Naked Capitalism, by Washington’s Blog:
"I’ve repeatedly documented that mortgages were pledged multiple times to different buyers. See this, this and this."

Rest here, and the answers from "some of the leading experts on mortgage fraud – L. Randall Wray (economics professor), Christopher Whalen (banking expert with Institutional Risk Analytics), and William K. Black (professor of economics and law, and the senior regulator during the S & L crisis)"

Los Alamos Study Group, plaintiff v. US DOE et al, defendent

For those not familiar with the attempt to force NNSA and LANL into complying with NEPA.  the August press release by the plaintiff, the Los Alamos Study Group [LASG], is a good place to start. Then one can go to the LASG home page, and fill in the blanks, the attempt by NNSA/DOE to circumvent the National Environmental Policy Act, by offering a Supplement to the 2003 Environmental Impact Statement. the attempt to squash the suit, the response to the squash, etc. The complaint is here.

Do read what is required under NEPA  Council of Environmental Quality Regulations [CEQ-Regs], especially PART 1502--ENVIRONMENTAL IMPACT STATEMENT 

Sec. 1502.1 Purpose. eg states:
An environmental impact statement is more than a disclosure document. It shall be used by Federal officials in conjunction with other relevant material to plan actions and make decisions. 
Sec. 1502.14 Alternatives including the proposed action.
This section is the heart of the environmental impact statement. Based on the information and analysis presented in the sections on the Affected Environment (Sec. 1502.15) and the Environmental Consequences (Sec. 1502.16), it should present the environmental impacts of the proposal and the alternatives in comparative form, thus sharply defining the issues and providing a clear basis for choice among options by the decisionmaker and the public. In this section agencies shall:
(a) Rigorously explore and objectively evaluate all reasonable alternatives, and for alternatives which were eliminated from detailed study, briefly discuss the reasons for their having been eliminated. (b) Devote substantial treatment to each alternative considered in detail including the proposed action so that reviewers may evaluate their comparative merits.
(c) Include reasonable alternatives not within the jurisdiction of the lead agency.
(d) Include the alternative of no action.

Monday, October 25, 2010

On the State of Department of Defense Account

Winston Wheeler's account of the Pentagon Black Hole at the Huffington Post.
Quite literally, the Department of Defense (DOD) does not know what happens to the money the taxpayers give it. This has been true for decades. The money gets spent; it's gone (they're pretty sure), but the prices DOD paid, when -- if ever -- the purchases were delivered, where everything is now, and a lot more are all quite unknown to the Pentagon. This incomprehensible condition has been documented in hundreds of reports over three decades from both the Government Accountability Office (GAO) and the Department's own Inspector General (DOD IG). The studies are routinely sent to Pentagon managers and Congress. Once or twice a year, there will be a hearing on Capitol Hill; both Republicans and Democrats will declare themselves oh-so shocked; the DOD witnesses will say they are getting close to fixing it; outraged press releases flurry over Washington DC; a few press articles are written, and on very rare occasion, a scapegoat might get fired. Then, everyone goes back to sleep, and nothing happens. 

On the State of Teaching Economics of War and Peace;

Teaching the Economics of War and Peace

from Economists for Peace and Security

At present, even within defense and security institutions, virtually no training opportunities exist in this field, no possibilities for students, security personnel, the NGO community, or other interested parties to receive an informed overview of the economic causes and consequences of defense expenditure, how economic theory helps illuminate, formulate, and evaluate policy options.

Santa Fe Council of International Relations – Responding to a Steve Clemons Challenge

This post was written partially in accepting a challenge by Steve Clemons in his post

where he stated:

Complaining and whining about government and spending and better leadership is easy -- but actually developing sensible, workable policy frameworks and alternatives is hard. But it's what we have to do.

So what I suggest to Larry Wilkerson in his upcoming SFCIR event (and to Richard Rhodes in future book promotion events):

Be clear and honest in terms of describing what attendees can expect by attending.

And to the SFCIR I suggest:

How about hosting an event where the topic of "eliminating nuclear weapons" is actually discussed, by those that see their elimination as a serious alternative? That have actually worked to eliminate, rather than promote, nuclear weapons? An obvious participant would be Greg Mello, of the Los Alamos Study Group, whose group has filed a lawsuit against DOE, NNSA to force compliance with NEPA, and stop construction of the CMRR until an EIS has actually been performed. I would also like to be on that panel. And unlike the last panel’s insistence on a one sided viewpoint, I would even be willing to include one of the SFCIR panelists, Steve Younger. Other nuclear abolitionists in the Santa Fe area might include Scott Kovacs and Joni Arends.

The person [Nicholas Thompson, the grandson of Paul Nitze] who wrote the NYTimes review of Twilight wrote:

Though subtitled “Recent Challenges, New Dangers, and the Prospects for a World Without Nuclear Weapons,” Rhodes’s new book doesn’t really deliver on that last phrase…


How do we reduce the number of nuclear states? Will the United States ever commit to unilateral reductions and hope that Russia, and then everyone else, follows? Will weapons eventually have to be handed over to the United Nations? Should the international community centralize authority over all civilian nuclear power, since that is the habitual cover for bomb makers? There are unfortunately few people working on these questions, and the world’s shunning of the topic means that “The Twilight of the Bombs” probably doesn’t actually describe a real twilight.

BTW, Paul Nitze (the Hawk in Nicholas Thompson’s book “The Hawk and the Dove” ) wrote the famous NYTimes OpEd “ A Danger Mostly to Ourselves” where he advocated:

The fact is, I see no compelling reason why we should not unilaterally get rid of our nuclear weapons. To maintain them is costly and adds nothing to our security.”

Strange that the panel could not find the path to eliminating nuclear weapons that the once super hawk saw so clearly.

But the composition of the panel and Upton Sinclair’s observation- “"It is difficult to get a man to understand something when his salary depends upon his not understanding it” – clears that up.

We should have expected an effort to “sell” a vested interest product- the CMRR- to the public and try to counter the LASG lawsuit.

Richard Rhodes and Panel Discuss Elimination of Nuclear Weapons"- NOT

For those following nuclear weapons there was this recent forum, marketed by the Santa Fe Council of International Relations

with the Headline:

"Richard Rhodes and Panel Discuss Elimination of Nuclear Weapons"

which actually turned out to be a marketing effort for "nukes forever", why we can't ever eliminate them, and how we should be thankful for the technical expertise on "our side" protecting us from "them". Lots of talk about how to look for the bogeyman under every bed, and not a clue that what matters and keeps us safe is what is in out hearts, or how to translate that concept into workable operations.

The panel reminded me of the story of a drunk looking for his keys on his lit porch, rather than down the dark driveway,where the keys were dropped, "because he can see better there".

from the LANL site:

Expert panel
The panel, consisting of the author and former Director Browne; Damon Giovanelli, former Lab director of Physics Research; Terry Hawkins, acting director of the Lab's Office of Counterintelligence; and Steve Younger, former director of the Defense Threat Reduction Agency, will discuss the future of nuclear weapons. The discussion, facilitated by Jay Davis, president of the Hertz Foundation and a National Security Fellow at the Center for Global Security Research at Lawrence Livermore National Laboratory, will address issues, such as:
  • the nuclear threat to the U.S.
  • vulnerabilities of Western society
  • challenges and risks to the U.S. and her allies as the stockpiles declines
  • possible international initiatives.

Nothing here about "exploring world without nukes" - but then what do you expect from a panel loaded with those making a living from nuclear weapons, and excluding those that think one needs to look and understand what is in one's heart rather than in one's hidden armory? That is clueless that love is an art, and more about developing the capacity to love others, rather than making yourself "lovable" in the romance market. Are they aware that three of the ten editors in my Erich Fromm Book, the World Perspective Series, were giants in the development of the first atomic weapon- Neils Bohr, I.I. Rabi, and J. Robert Openheimer?

Do they tell the public of the nuclear abolitionists among those early scientists? Of Hans Bethe's admonition, the open letter to weapons scientists, written in 1995:

"I call on all scientists in all countries to cease and desist from work creating, developing, improving and manufacturing further nuclear weapons and, for that matter, other weapons of potential mass destruction such as chemical and biological weapons."

Do these panelists think themselves smarter that Bethe? Than Joe Rotblat? Than Leo Szilard? I.I. Rabi?

At least LANL was honest whereas the Santa Fe Council of International Relations was not. Or was the Council merely duped?

"America's commitment to seek the peace and security of a world without nuclear weapons." was clearly not on the table

I for one would have liked to have known that this was to be a LANL marketing effort for the CMRR before driving down from Taos and spending $20.00

“There is nothing comparable in our history to the deceit and the lying that took place as official Government policy in order to protect [the nuclear arms] industry.
P. 294 in Dan O’Neill “The Firecracker Boys”.

"More and better bombs. Where will this lead . . . is difficult to see. We keep saying, 'We have no other course'; what we should say is, 'We are not bright enough to see any other course.” -- David Lilienthal, former AEC Chairman

"It is difficult to get a man to understand something when his salary depends upon his not understanding it." -- Upton Sinclair

“For as one’s thinking is, such one becomes, and it is because of this thinking that thinking should be purified and transformed, for were it centered upon truth as it is now upon things perceptible to the senses, who would not be liberated from his bondage?”
– Maitri Upanishad

"When a pickpocket meets a saint, all he sees are his pockets" --- Sri Ramakrishna